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Builders Want to Build but What About the Land?

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Land Planning

Builders Want to Build but What About the Land?

"You can’t just pour more beans in the top of the funnel and produce more coffee.” 


December 28, 2020
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Image: stock.Adobe.com

Home builders are worried they are running out of land. 

Acquiring and preparing land for new-home construction can be a lengthy process. Builders often buy land at least a year before building on it, and they sometimes spend years obtaining permits, installing sewage systems or paving roads before they prepare lots for sale. Now, with much of their land inventory still in the development process, builders face the prospect of a shortage next year of finished lots, or land that is ready to build, according to Jody Kahn, senior vice president at John Burns Real Estate Consulting LLC, which regularly surveys builders and land brokers.

“You can’t just pour more beans in the top of the funnel and produce more coffee,” Phillippe Lord, chief operating officer at Scottsdale, Ariz.-based builder Meritage Homes Corp., tells the Wall Street Journal. “The competition for land is extremely high as the home buying demand grows,” said Mr. Lord, who becomes chief executive on Jan. 1.

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